MORNINGS WITH MARIA IS LIVE
RIGHT NOW.
LET’S LOOK AT THIS RALLY THIS
MORNING, FUTURES EXTENDING THE
MOVE YESTERDAY, NEWS OF A
SHORT-TERM DEAL TO RAISE THE
DEBT CEILING LIFTING SENTIMENT
THIS MORNING AND LATE YESTERDAY
ALL THREE MAJOR INDICES ERASING
A SHARP DECLINE EARLY YOU IN THE
SESSION TO FINISH UP 102 POINTS
ON THE DOW.
JOINING ME RIGHT NOW IS MOHAMED
L ARIAN, THE QUEENS COLLEGE
CAMBRIDGE PRESIDENT AND AND
ADVISER ALSO JOINING THE
CONVERSATION ALL MORNING LONG IS
MARK TEPPER AND ANGELA MORIBITO.
MOHAMED, GREAT TO SEE YOU THIS
MORNING.
THANK YOU VERY MUCH FOR JOINING
THE CONVERSATION.
>> THANK YOU FOR HAVING ME,
MARIA.
MARIA: I WANT TO TALK ABOUT WHAT
THE MACRO STORY LOOKS LIKE FROM
YOUR STANDPOINT, MOHAMMED,
YOU’VE BEEN A STUDENT OF THIS
MACRO STORY AND POLICY FOR
DECADES AND GET YOUR TAKE AND
WHAT YOU’RE SEEING IN TERMS OF
THE BACKDROP GROWTH AND
SUPPORTING THE STOCK MARKET AND,
OF COURSE, OUR INVESTING IDEAS.
HOW DO YOU SEE THINGS TODAY?
>> SO IN THE SHORT-TERM SOMEWHAT
LESS UNCERTAIN BECAUSE OF WHAT
YOU TALK ABOUT THE DEBT CEILING
BUT ALSO IN EUROPE BECAUSE
RUSSIA HAS SIGNALED THAT IT MAY
INCREASE ENERGY SUPPLIES.
SO TWO MAJOR UNCERTAINTIES HAVE
COME DOWN, HOWEVER, WHEN YOU GO
BEYOND THAT, MAJOR
UNCERTAINTIES, THE GLOBAL
RECOVERY IS SLOWING AND CHINA IS
SLOWING AND INFLATION IS AN
ISSUE AND I’M NOT OF THE VIEW
THAT INFLATION IS TRANSITORY AND
THERE’S A LOT OF GEOPOLITICAL
TENSIONS SO SHORT-TERM, LESS
UNCERTAIN AND THE MARKET
CERTAINLY HAS WELCOME THAT.
LONGER TERM, THERE ARE SOME
MAJOR UNCERTAINTY THAT IS THE
MARKET WOULD HAVE TO NAVIGATE.
MARIA: YEAH, MOHAMED, LET ME GET
INTO SOME OF THOSE IMPORTANT
ITEMS THAT YOU JUST MENTIONED,
LET ME START WITH OIL PRICES
THIS MORNING PULLING BACK FROM
YEAR HIGHS, REACHED THIS WEEK,
CRUDE INVENTORIES UNEXPECTEDLY
UP BY 2.3 MILLION BARRELS LAST
WEEK AND UK NATURAL GAS PRICES
WERE DOWN 36% YESTERDAY FROM THE
HIGHS AFTER PUTIN SAID THAT
RUSSIA IS READY TO HELP
STABILIZE GLOBAL MARKETS.
WHAT DO YOU THINK THAT MEANS,
GIVE US THE RUSSIA ANGLE HERE
WITH REGARD TO OIL AND WHAT THAT
MEANS FOR NET GAS AND OIL OVER
THE NEAR TERM.
>> SO I THINK THE MARKET GOT A
LITTLE BIT CARRIED AWAY
ESPECIALLY IN GAS AND GOT
CARRIED AWAY FOR GOOD REASONS,
NOT ONLY DID YOU HAVE A SUPPLY
SHORTAGE BUT YOU HAD CHINA
ANNOUNCE THAT THEY HAD SECURED
ALL SUPPLIES FOR THE WINTER SO
YOU HAD PEOPLE ACCELERATING,
BRINGING THE DEMANDS OF TERM AND
YOU HAD THE MASSIVE SHORT-TERM
IMBALANCE AND NOW THAT RUSSIA
SAYS THEY ARE WILLING TO
INCREASE SUPPLIES BUT PEOPLE ARE
STILL WONDERING WHAT DOES RUSSIA
WANT IN RETURN SO IT’S NOT CLEAR
WHETHER THIS IS A LONG-TERM
SOLUTION OR NOT, BUT MORE
GENERALLY, SOMETHING THAT WE ARE
GOING TO BE TALKING ABOUT FOR
QUITE A WHILE AND WE HAVE
ALREADY IS SUPPLY DISRUPTION.
WE’VE GONE FROM A WORLD WHERE
DEMAND WAS A PROBLEM WITH SUPPLY
IS A PROBLEM AND THE WHOLE WORLD
IS EXPERIENCING THE SUPPLY
DISRUPTIONS.
>> YEAH, APPARENTLY RUSSIA IS
LOOKING FOR LONG-TERM CONTRACTS
AND WILLING TO INCREASE SUPPLY
ONLY FOR THE LONG-TERM AND --
AND I WONDER IF THAT’S GOING TO
IMPACT THE MACRO STORY, MOHAMED,
BECAUSE, YOU KNOW, IN THE PAST
WHEN YOU SEE OIL PRICES MOVE
HIGHER, THAT COULD ACT AS A
HINDRANCE TO ECONOMIC GROWTH.
WE’VE GOT THE SEPTEMBER JOB’S
REPORT OUT TOMORROW, AGAIN, HERE
WE HAVE TO LOOK AT THE FACT THAT
THE -- THE EXTENDED UNEMPLOYMENT
BENEFITS GOING AWAY, WHAT DOES
THAT MEAN FOR THE JOB’S PICTURE,
ECONOMISTS ARE EXPECTING 500,000
JOBS ADDED TO THE ECONOMY LAST
MONTH WITH THE UNEMPLOYMENT RATE
TICKING SLIGHTLY LOWER TO 5.1%
AND, OF COURSE, WE’VE GOT
SPECIAL COVERAGE TOMORROW AT
8:00 A.M. EASTERN ON THE JOB’S
NUMBER.
WHAT DO YOU THINK WE ARE SEEING
IN TERMS OF THE LABOR MARKET
RIGHT NOW KICKED OFF WITH THE
SEPTEMBER REPORT BECAUSE THE
BACKGROUND HAS CHANGED HERE,
RIGHT, WITH THE UNEMPLOYMENT
BENEFITS GOING AWAY?
>> THEY HAVE BUT THE LABOR
MARKET HASN’T RESPONDED TO THE
DEGREE THAT SOME PEOPLE THOUGHT
WHICH SUGGESTS A COUPLE OF
THINGS, ONE IS WE MAY BE SEEING
THE CHANGE IN PEOPLE’S
WILLINGNESS TO WORK IN CERTAIN
PROFESSIONS.
THAT EXPLAINS WHY WE HAVE
10 MILLION VACANCIES EVEN THOUGH
THE EMPLOYMENT RATE ISN’T BACK
TO WHAT IT WAS BEFORE THE
PANDEMIC.
YOU CAN THINK IN THIS REGARD OF
ALL OF THE PEOPLE WHO HAVE
THOUGHT THIS IS THE TIME TO
RETIRE BECAUSE THEY ARE WORD
ABOUT THE SAFETY OF THEIR PLACE.
PROFESSIONS UNDER ENORMOUS
PRESSURE, CERTAINLY HEALTH CARE
AND TRUCK DRIVERS SO THAT A HOST
OF QUESTIONS ABOUT HAS THE
PROPENSITY TO WORK CHANGED AND
THEN SECONDLY, THE QUESTIONS
ABOUT CHILD CARE, ABOUT SCHOOLS.
WE WILL SEE NO ONE HAS AN ANSWER
AS TO HOW THIS LABOR MARKET IS
GOING TO FUNCTION.
WE HOPE IT GETS BACK TO NORMAL,
BY NORMAL LABOR PARTICIPATION
GOES UP AND WE CREATE A LOT OF
JOBS BUT THERE’S A LOT OF
QUESTION MARKS.
MARIA: MOHAMED HOW ARE YOU
ALLOCATING CAPITAL?
THE NEAR TERM?
WE ARE TALKING ABOUT THE DEBT
CEILING DEAL, PERHAPS PUTTING US
TO DECEMBER IN TERMS OF
WONDERING WHAT HAPPENS NEXT IN
TERMS OF THE DEBT CEILING.
YOU’VE GOT THIS INFLATION STORY
CONTINUING.
UNCERTAINTY OVER RECONCILIATION
PACKAGE AND POLICY HERE AND
INFLATION HERE, HOW DO YOU WANT
TO ALLOCATE CAPITAL.
WHAT ARE YOU SAYING?
>> IF YOU’RE A SHORT-TERM
INVESTOR, WHAT YOU NEED TO BE
LOOKING AT IS THE FEDERAL
RESERVE AND WHETHER IT CAN
PAPER, WE USE ASSET PURCHASES IN
AN ORDERLY FASHION.
THAT IS THE MOST IMPORTANT
DETERMINANT FOR THE NEXT FEW
WEEKS.
IF YOU ARE LONGER TERM, YOU HAVE
TO RECOGNIZE THAT THERE’S A LOT
OF FLUIDITY, A LOT OF MOVING
PIECES SO DON’T MAKE ANY
NONRECOVERABLE MISTAKES.
MOST MISTAKES IN INVESTMENT
WORLD CAN BE RECOVERED OVER TIME
BUT THERE ARE A FEW THAT ARE
NONRECOVERABLE WHICH MEANS A LOT
OF ANALYSIS, MAKE SURE THAT YOU
EMBRACE LONG-TERM AND YOU NEED
ACTIVE MANAGEMENT FOR THIS
WORLD.
IT’S A DIFFERENT ENVIRONMENT
THAN WHAT WE HAD IN THE LAST FEW
YEARS BECAUSE OF WHAT’S
HAPPENING ON THE SUPPLY SIDE.
MARIA: MOHAMED, GREAT TO TALK
WITH YOU.
THANKS SO MUCH FOR WEIGHING IN
THIS MORNING.